The RTP #network now has 29 participating financial institutions which can reach 53% of demand deposit accounts in the U. S. Consumer and business customers can now receive #payments directly into their accounts with real-time receipt confirmation and nearly instant availability.
Financial Technology
CLS is extending its facilities for FX #matching to currencies that aren’t included in its #settlement services, using distributed ledger #technology.
Financial Technology
Gone is the #world where a watch just keeps time and a refrigerator simply preserves food. From wearables and smart speakers to smart appliances, connected cars and #beyond, the Internet of Things (IoT) has gained the attention of consumers and businesses alike. At its most basic level, IoT is the network of “smart”, connected devices or products that enable new forms of communication and new experiences. The global IoT market is estimated to grow to $ 2.9 trillion with 20 billion connected devices by 2020.¹
IoT devices, combined with emerging payments capabilities, facilitate a connected commerce experience, providing consumers with a convenient way to transact by incorporating shopping and payments functionality into devices. For example, Amazon has enabled its customers to make purchases via its Echo devices using Alexa voice commands. Through the Groceries by Mastercard program, consumers can purchase grocery items through their Samsung refrigerators and have them delivered by the program’s grocery delivery services partners. Ford and ExxonMobil maintain a partnership to allow consumers to make Speedpass+ fuel payments through their in-car infotainment system.
The physical device is only one component of the infrastructure required to support IoT payments. It also must include a user interface, which is often a screen, but may also be a button, voice interaction, or geo-location. The IoT device must establish and maintain connectivity to a back-end platform that receives the data; this connectivity may be supported via Wi-Fi, Bluetooth or LTE. Payment credentials must be tokenized and maintained in a secure environment, either locally or in the cloud, and security is embedded through advanced authentication, often in the form of biometrics (such as voice command).
IoT payments require a coordinated effort through the device manufacturers, payment providers and #technology integration partners. Visa and Mastercard are seeking to accelerate IoT payments engagement and enablement as part of the companies’ respective digital payment readiness programs, Visa Ready and Mastercard Engage. Both efforts have focused on facilitating secure payments across the value chain and connecting IoT device manufacturers to financial institutions. Discover and American Express have also linked payment tokenization platforms and security protocols to third-party products (namely, wearables) to enable their cardholders to take advantage of IoT-based products and services. Such market activity represents a logical progression for payment networks to push new use cases for their tokenization offerings.
As expected with any new payments technology, IoT payments have a heavy focus on security. Large chip manufacturers (including NXP and Intel) have entered the space, providing secure elements to store payments credentials. Other entrants focus on innovative methods of enhancing payments security. MagicCube, which names Visa² and Mastercard among its partners, offers device manufacturers a trusted execution environment (TEE) security platform to provide payments security in lieu of a secure hardware element or software-based encryption.
It was not long ago that consumers, issuers, processors and networks were responsible for maintaining and securing only a single payments device: the card. As smart phones, refrigerators, watches and cars, among other things, become payment devices, card volume should start to migrate from the physical card to digital payments via IoT devices. Issuers must focus on developing strategies to ensure their cards remain top-of-wallet for consumers who make IoT purchases. Card networks are likely to continue facilitating partnerships with device manufacturers to optimize use of the emerging technology.
For traditional card processors, there may be an opportunity to enhance the processing of solutions with features to support device management. For example, card processors might use a data field that tracks the device (card, phone, watch, refrigerator) and authentication method used to make a payment, thereby increasing the opportunity for more insightful customer analytics. There may also be opportunities for alternative, non-card payment mechanisms (real-time payments, #blockchain/distributed ledger-based, and such) to take hold. We expect IoT payments to remain a key source of value, innovation and growth for both traditional payment providers and new market entrants.
I invite you to read more about Accenture’s capabilities and offerings in the IoT and Connected Commerce space.
Special thanks to David Cencula, who also contributed to this blog.
1 https://www.gartner.com/newsroom/id/3598917
2 Visa is also an investor in MagicCube
Jeff Crawford, Senior Manager, Payments
The post Beyond plastic: Payments in a connected world appeared first on Accenture Banking Blog.
#Fintech #innovation at Rabobank is making itself felt in fields outside of #financial #services. The bank’s innovation lab pioneered an IoT project for agriculture and is an example of how innovation in financial services touches virtually every industry. “We ended up with a project called MOOvement, which is an IoT device used for tracking cattle on farms, today […]
Bank Innovation
On 13th January 2018, the second Payment Services Directive (#PSD2) came into force, defining a new chapter in the European payments market. It requires #banks to open their systems to third parties and provide interfaces to them to initiate payments on accounts, retrieve account information and a confirmation of availability of funds on accounts. Application programming interfaces (#APIs) play a vital role and standardized APIs are required to avoid fragmentation in the European market, and promote the digital ecosystem. PSD2 does not come with an API standardization. To help fill this gap, the Berlin Group—consisting of almost 40 banks, associations and PSPs from across the EU—has defined a common API standard called “NextGenPSD2”, which provides guidelines to reduces XS2A complexity. It is ready to be used by banks and TPPs for implementing PSD2-required bank account access.
Berlin Group’s NextGenPSD2 is the leading API framework that helps banks to #build API standards. Since NextGenPSD2 does not specify one single API standard, banks #should follow basic principles of API design and build API standards that are state of the art:
Time is short. By 14th September 2019, banks are mandated to be RTS-compliant and even make APIs available for testing and piloting six months before the market launch. Having the optimal APIs in place that follow best practice principles will be crucial for banks’ “#Beyond PSD2” open banking strategy.
Have a look at my complete blog and share your views.
The post How banks should act now to build state-of-the-art APIs for PSD2 and beyond appeared first on Accenture Banking Blog.
EXCLUSIVE- Global #technology company IBM is involved in more than 400 #blockchain projects, according to its vice president of blockchain technologies, Gennaro “Jerry” Cuomo, who testified before Congress yesterday. That number doesn’t surprise IBM Director of Worldwide Payments, Rajesh Venkatraman, who told Bank Innovation, “most of our customers are in some shape or form exploring […]
Bank Innovation
EXCLUSIVE—With mobile #banking services offered at the majority of financial institutions, innovating the #digital space is becoming more important in the #fintech ecosystem, especially for smaller players like regional #banks or credit unions. So, how can these smaller institutions move their digital platforms #beyond the simplest (and expected) mobile banking service? “First off, we need […]
Bank Innovation
EXCLUSIVE- #PayPal wants to move #beyond #payments, according to its CFO John Rainey, who said the company will focus on a combination of partnerships and investments in companies that can propel the payments companies into other areas. Rainey pointed to the PayPal’s recent partnership with investing platform Acorns as an example of this desired move […]
Bank Innovation
EXCLUSIVE- With two products and a recently announced partnership with tax preparation software provider #Intuit, #Marcus by #Goldman Sachs is keen on growing its brand through more new #partnerships and products in 2018. “The future of finance is not #technology,” Harit Talwar, head of Marcus by Goldman Sachs, said at Money 20/20 in Las Vegas. “The […]
Bank Innovation
#AutoFi raised $ 10 #million in #Series A funding, which it plans to use to “accelerate” the growth of its lender, manufacturer, and dealer partners, the #fintech company announced today. Bookmark
Bank Innovation
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